11.

Income Taxes

The Company is required, at the end of each interim period, to estimate its annual effective tax rate for the fiscal year and use that rate to provide for income taxes for the current year-to-date reporting period. Due to the effects of the deferred tax valuation allowance and changes in unrecognized tax benefits, the Company's effective tax rates in 2012 and 2011 are not meaningful as the income tax benefit is not directly correlated to the amount of pretax income or loss. The income tax benefit of $0.1 million during the three months ended March 31, 2012 was not material to our results of operations. The Company's income tax benefit of $3.8 million during the three months ended March 31, 2011 resulted primarily from our 2011 first quarter settlement with the IRS on the audit of our 2004 and 2005 federal income tax returns.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The decrease in the Company's total deferred tax asset at March 31, 2012 (per the table below) resulted primarily from a decrease in the Company's unrealized loss on marketable securities.

A valuation allowance is recorded against a deferred tax asset if, based on the weight of available evidence, it is more-likely-than-not (a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized. At March 31, 2012 and December 31, 2011, the Company had a full valuation allowance recorded against its net deferred tax assets. The Company's future realization of its deferred tax assets ultimately depends upon the existence of sufficient taxable income in the carryback or carryforward periods under the tax laws. The Company will continue analyzing, in subsequent reporting periods, the positive and negative evidence in determining the expected realization of its deferred tax assets.

The tax effects of significant temporary differences that give rise to the net deferred tax asset are as follows.


	March 31, 2012			December 31, 2011
	(Dollars in thousands)
Deferred tax assets:
Federal net operating loss carryforward	$	138,294		$	133,454
State net operating loss carryforward		53,890			53,350
Asset impairment charges		27,871			31,137
Accrued liabilities		26,298			29,600
Stock-based compensation expense		26,946			26,771
Alternative minimum tax and other tax credit carryforwards		10,296			10,296
Inventory, additional costs capitalized for tax		3,466			3,466
Unrealized loss on marketable securities		266			2,787
Other		1,541			1,522

Total deferred tax assets		288,868			292,383
Valuation allowance		(277,185	)		(281,178	)

Total deferred tax assets, net of valuation allowance		11,683			11,205

Deferred tax liabilities:
Deferred revenue		5,959			5,589
Property, equipment and other assets		804			706
Accrued liabilities		32			32
Inventory, additional costs capitalized for financial statement		538			542
Other, net		4,350			4,336

Total deferred tax liabilities		11,683			11,205

Net deferred tax asset	$	—		$	—